General insurers can expect their earnings to come under pressure for another reason. While the finance ministry has directed GIC not to accept loss-making business, the government has asked GIC to halve the commission it pays out to insurance companies on businesses that have to be compulsorily reinsured to 5percent. Reinsurance commission is remunerated by the reinsurance company to the primary insurance companies to clear up the expenses that they gain in acquiring business. A cut in commission paid out is equivalent to increasing the cover cost. Previously, the ministry had asked GIC not to pay commission at all on businesses that are compulsorily reinsured. IRDA asked GIC to abide by its contract with insurers and restore the 10 percent commission, following complaints from insurers who felt short-changed. The government has once again intervened and asked GIC to pay out 5 percent against the promised 10 percent. This will raise the cost of reinsurance cover for primary underwriters and would add to price pressures.